26 May 2017   

5 min read
Sunday and public holiday penalty rates have been cut by the Fair Work Commission (FWC) for some retail, fast-food and hospitality workers, a move that has been welcomed by the Australian Retailers Association (ARA).

Sunday penalty rates for permanent and part-time employees will be reduced from 200% to 150%, while penalty rates for casual employees will be reduced from 200% to 175%. 

Russell Zimmerman, executive director of the ARA has said the FWC’s decision will bolster growth in the retail industry and provide more employment opportunities for young workers seeking additional hours or employment over the weekend. 

As reported in Inside Retail, Mr Zimmerman said reducing Sunday rates from double time to time and a half will give employers a 4 to 5 per cent reduction on wages “which they will be able to reinvest in employing more staff, increasing employment in the retail industry.” 

The FWC’s decision to cut Sunday and public holiday penalty rates better reflects Australia’s modern 24/7 economy and consumer expectations for convenience, better service and round-the-clock shopping and entertainment. 

Retail strategy consultant Peter James Ryan commenting in Inside Retail said that “penalty rates date back to a time when many …didn’t want trading on Sundays or after office hours and the dynamics of households were single income. That world ended decades ago.” Now, he says, retailers need to sell flexibility in work hours as an advantage not a disadvantage and to champion the importance of retail and hospitality as major employers in Australia. 

The rate cut is a positive outcome for the retail industry as it will increase retail growth by giving employers more capacity to keep businesses open on Sundays, hire more staff, give more hours to existing staff, increase services and benefit from increased opening hours and increased staff levels. For customers, the rate cuts will mean more choice and a better experience, as more retailers and entertainment and hospitality venues can afford to stay open on Sundays. 

The changes to public holiday rates will begin on 1 July 2017. The FWC has proposed that Sunday penalty rate cuts will take place in a series of annual adjustments most likely two — from 1 July 2017. If you’d like to know more about what the cuts mean for your business, head to www.fwc.gov.au.

What it means

Retail: Sunday penalty rates for full-time and part-time workers will fall from 200 % (double time) to 150% (time and a half). The rates for casuals will fall from 200% to 175%. 

Fast food: Sunday penalty rates will fall from 150% to 125% for full-time and part-time workers. 

Hospitality: Sunday penalty rates will be cut from 175% to 150%. No change for casual workers. Sunday penalty rates for workers in restaurants and licensed clubs will not change. 

Pharmacies: Sunday penalty rates will be cut between the hours of 7am to 9pm from 200% to 150%. Rates for casual employees will fall from 200% to 175%.